• Chile President Gabriel Boric Font is on a State visit to India from April 1-5, commemorating the completion of 76 years of diplomatic relations between the two countries.

• Prime Minister Narendra Modi held bilateral talks with Boric at Hyderabad House.

• Both leaders recalled the historic diplomatic ties that were established in 1949, growing trade linkages, people-to-people linkages, cultural ties and also the warm and cordial bilateral relations between both countries. 

• They expressed desire for further expanding and deepening the multifaceted relationship between the two countries in all areas of mutual interests.

CEPA to unlock full potential of commercial ties

• The two leaders noted that trade and commerce has been a strong pillar of bilateral relations. While highlighting the positive effects generated by the expansion of the India-Chile Preferential Trade Agreement in May 2017, which has resulted in substantial increase in bilateral trade, the two leaders emphasized the need for further strengthening of bilateral trade mechanisms that could open new opportunities for expansion of bilateral trade. 

• President Boric conveyed that India is a priority partner for Chile in the global economy and stressed the need to explore strategies for enhanced and diversified trade between the two countries. 

• Both leaders acknowledged signing of the mutually agreed Terms of Reference and welcomed the launch of a Comprehensive Economic Partnership Agreement (CEPA) negotiations for a balanced, ambitious, comprehensive, and mutually beneficial agreement to achieve a deeper economic integration. The CEPA will aim at unlocking the full potential of the trade and commercial relationship between India and Chile, boosting employment, bilateral trade, and economic growth.

• To further promote trade relations as well as people-to-people interactions, President Boric announced Chile’s decision to grant a Multiple Entry Permit for Indian businesspersons which will streamline the visa process. 

Other key points discussed:

• Both leaders recognised the strategic importance of critical minerals for emerging technologies, advanced manufacturing, and clean energy transitions, both leaders agreed to accelerate collaboration in exploration, mining and processing along with research and development to promote investment across the entire critical mineral value chain for mutual benefit. 

• They expressed mutual interest in growth of investment, joint ventures, technological development and markets in the IT and digital space, including promoting collaboration in Digital Public Infrastructures (DPI), thereby democratizing access to digital services for people and businesses. 

• Both leaders expressed their happiness on signing of the Letter of Intent to strengthen existing Antarctic cooperation, which will further facilitate partnership in Conservation of Antarctic Marine Living Resources bilateral dialogues, joint initiatives and academic exchanges related to Antarctica and Antarctic policy. Both India and Chile are Consultative Parties to the Antarctic Treaty and reaffirmed their commitment to deepen scientific understanding of Antarctica for the benefit of both parties and the global community.

India-Chile relations

• India and Chile established diplomatic relations in 1949.

• Since 1956, there has been a significant flow of official visits by authorities from both countries. 

• One of the most important milestones in the relations took place with the official visit of President Ricardo Lagos to India in January 2005. This visit was the first official visit by a Chilean President to India. On that occasion,  various agreements were signed, covering a wide range of economic and agricultural issues. 

• One was the Economic Cooperation Framework Agreement through which both sides expressed their intention to deepen their economic relations. In this context, the negotiations to sign a ‘Partial Scope Trade Agreement’ began. This agreement was signed in 2006 and entered into force in 2007.

• In 2017, the first extension of the Partial Scope Agreement was completed, which allowed for the extension of the preferences granted by both countries.

• In another area of cooperation, in August 2019 a Memorandum of Understanding was signed between the National State Supply Center of Chile (CENABAST) and the Indian State Trade Corporation (STC), with the aim of advancing in the acquisition, by Chile, of generic medicines from India.

• In October 2020, the first India-Chile Joint Commission Meeting was held in virtual mode with Minister of External Affairs S. Jaishankar and Andrés Allamand, Foreign Minister of Chile as co-chairs. 

• A new dimension was added to the bilateral ties with India’s acceptance of a proposal by Chile to open a Consulate in Mumbai.

• In March this year, a meeting was held for the first time between the defence ministries of both countries, which sought to explore the cooperation possibilities of the respective defence industries. 

• India and Chile have signed agreements/MoUs covering various fields of cooperation such as sports, S&T, Antarctica, defence, air services, agriculture, new and renewable energy, education, outer space, geology and mineral resources.

• Chile is the fifth largest trading partner of India in the Latin America and Caribbean region.

• Two-way trade between India and Chile was worth $3.8 billion in 2023-24.

• Indiaʼs exports to Chile had been growing steadily since 2009, with the exception of a slight decrease in 2014, when a new carbon tax on diesel vehicles in Chile adversely affected motor vehicle exports from India, but the sector saw a big recovery later on. 

• Indiaʼs trade with Chile registered a negative growth over a couple of years due to the global slowdown and the domestic social crisis and labour unrest in Chile. The trade has since picked up and shown a robust recovery.

• Indiaʼs export to Chile are diversified and constitute motor vehicles/cars, drug formulations, chemicals, products of iron & steel, man-made yarn, fabrics, cotton fabrics, made-ups, auto components, electric machinery and equipment, leather goods, rubber products, bulk drugs, drug intermediates, footwear of leather, iron and steel, aluminium & its product, ceramics & allied products, etc.

• Bilateral relations between India and Chile continue to grow and strengthen with interactions and cooperation in multilateral fora.

(The author is a trainer for Civil Services aspirants.)